On January 22, 2024, the US Federal Trade Commission (FTC) announced its annual updates to the Hart-Scott-Rodino (HSR) Act reportability thresholds and as well as the first updates to the recently restructured HSR Act filing fee thresholds and amounts.[1] Both the updated HSR reportability thresholds and the updated filing fees will go into effect 30 days from publication in the Federal Register.[2] These HSR updates follow the annual adjustments to the Clayton Act Section 8 enforcement thresholds on interlocking directorates that were announced on January 12, 2024.[3]
I. Updated HSR Reportability Thresholds
If a transaction crosses the HSR Act’s reportability thresholds and an exemption is not available, parties to the transaction must report it to the FTC and the US Department of Justice (DOJ) prior to consummation.[4]
Pursuant to the updated thresholds, a transaction will be reportable if either of the following is true and an exemption is not available:
- The transaction value is greater than $478 million (previously $445.5 million); OR
- (i) The transaction value is greater than $119.5 million (previously $111.4 million); AND (ii) one party has net sales or total assets of $23.9 million or more (previously $22.3 million); AND (iii) a second party has net sales or total assets of $239 million or more (previously $222.7 million).
HSR Act reportability thresholds are adjusted annually to reflect changes in the US gross national product (GNP). This year’s threshold adjustments represent an increase of approximately 7% (compared to a ~10% increase in 2023).
II. Inaugural Updates to Restructured HSR Filing Fee Thresholds and Amounts
The 2024 updates represent the first time the six-tier filing fee structure introduced by the Merger Filing Fee Modernization Act (2023) has been updated. Unlike the prior three-tier filing fee structure, which did not annually adjust filing fee amounts, the six-tier structure is adjusted annually based on changes in the Consumer Price Index (CPI). The 3.7% increase in CPI as determined by the Bureau of Labor Statistics translates to the updated filing fee amounts as listed below, with transaction values updated based on changes to GNP:
| Updated Filing Fee | Transaction Value |
|---|---|
| $30,000 (same as prior year) | valued at more than $119.5 million but less than $173.3 million (previously $161.5 million) |
| $105,000 (previously $100,000) | valued at $173.3 million (previously $161.5 million) or more but is less than $536.5 million (previously $500 million) |
| $260,000 (previously $250,000) | valued at $536.5 million (previously $500 million) or more but is less than $1.073 billion (previously $1 billion) |
| $415,000 (previously $400,000) | valued at $1.073 billion (previously $1 billion) or more but is less than $2.146 billion (previously $2 billion) |
| $830,000 (previously $800,000) | valued at $2.146 billion (previously $2 billion) or more but is less than $5.365 billion (previously $5 billion) |
| $2,335,000 (previously $2,250,000) | valued at $5.365 billion (previously $5 billion) or more |
III. Proposed Changes to HSR Process Will Increase Demands on Agencies’ Resources
The expanded fee structure created by the Merger Filing Fee Modernization Act is intended to provide both the FTC and the DOJ with more resources to investigate transactions with potential competitive issues. The FTC and DOJ have noted that they will require additional resources to review transactions subject to the significant overhaul to the HSR Act filing form (HSR Form) and rules (HSR Rules) proposed by the FTC in Summer 2023. As we discussed in our July blog post, while the proposed HSR Form and Rules changes have not yet been issued in their final form, we anticipate many of the proposed changes will be adopted in the expansive formulation put forward in the draft form given the FTC’s and DOJ’s stated enforcement priorities.
If you have any questions, feel free to reach out to our Merger Antitrust Team, including Jamillia Ferris, Mary Lehner, Bruce McCulloch, Jenn Mellott, Meghan Rissmiller, Jan Rybnicek, and Justin Stewart-Teitelbaum.
[1] https://www.ftc.gov/news-events/news/press-releases/2024/01/ftc-announces-2024-update-size-transaction-thresholds-premerger-notification-filings
[2] Publication is pending, meaning they will be in force no earlier than February 23, 2024 but likely shortly thereafter.
[3] https://blog.freshfields.us/post/102ixda/new-interlocking-directorate-enforcement-thresholds-for-2024
[4] Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a.
